The U.S. economy needs its mojo back -- not just consumer confidence but a greater willingness to compete for business -- in the eyes of General Electric Co Chief Executive Jeff Immelt.
The head of the largest U.S. conglomerate and a top adviser to the Obama administration on jobs and the economy said he believed the nation was not trying hard enough to compete with global rivals including China.
This focus that globalization brings is good for us ... If I thought we'd tried our best as a country and still had the kind of trade deficits we have today, I'd be depressed, Immelt told a Thomson Reuters Newsmaker event in New York on Monday.
We're not trying that hard, he added. We haven't really tried as hard as we can to compete, educate, and sell our products around the world and I think we can do better.
The nation's economic malaise, now in its third year, has left many average Americans angry and frustrated with the system, Immelt acknowledged, saying that people in power need to empathize with their problems.
Unemployment is 9.1 percent. Underemployment is much higher than that, particularly among young people that don't have a college degree, Immelt said. It is natural to assume that people are angry and I think we have to be empathetic and understand that people are not feeling great.
A large and diverse group of protesters, who complain that the U.S. economic system is no longer working to the benefit of a large slice of the nation's population, have been a visible presence on Wall Street for a month now. The movement, known as Occupy Wall Street has spread around the country.
The protesters complain that the billions of dollars the U.S. government spent during the recession to prop up financial companies, including GE, have allowed banks to earn large profits without benefiting average Americans.
GROWTH THE ONLY ANSWER
The head of the world's largest maker of jet engines and electric turbines, said he regarded stronger growth as the only real answer to the rising disillusionment.
The only way to solve this specific problem is growth, Immelt said. If unemployment comes down people will feel better. If unemployment goes up people will feel worse, no matter what goes on Wall Street.
Immelt said that the gap between the pay of CEOs and average Americans is adding to tensions.
The discrepancy is certainly one of the problems today, in terms of why people feel the system is unfair, Immelt said.
But he noted that lowering CEO pay in and of itself would do little to lower unemployment.
If CEO pay goes way down and unemployment is 12 percent, people are still going to feel bad, Immelt said. It is a symptom but it is not the problem.
For his part, Immelt is confident that U.S. business can both compete with rivals in emerging markets such as China as well as profit in developing markets. He cited Russia as a major focus over the next decade, and added that GE is also investing in resource-rich African countries including Mozambique, Angola, Nigeria and South Africa.
GE expects to generate more than 60 percent of its revenue outside the United States this year. Analysts, on average, expect it to record $148.13 billion in 2012 revenue.
SEES SLOW EUROPEAN GROWTH
Concerns that Greece could default on its debt and threaten European and U.S. financial systems have rattled the world economy in recent weeks, pushing down stocks and prompting big banks including Bank of America Corp and JPMorgan Chase & Co to begin laying off staffers.
The most likely case is that Europe has slow growth for a long period of time, Immelt said. The process is going to have to be solved inside of Europe.
Last week, the White House advisory panel Immelt heads submitted a report to the Obama administration saying that attracting more foreign capital, being more aggressive in energy policy and investing in infrastructure could help create jobs in an economy struggling with high unemployment.
Immelt, a lifelong Republican, has drawn fire from some shareholders for his work with the Democratic Obama administration. The Cincinnati-born CEO defended his role, saying GE executives have long had a voice in Washington.
People need to try, he said. I'd rather be in the arena trying than not doing what I can to help.
Partisanship in Washington is hurting the nation's economy at this point by slowing efforts to reform the system, Immelt said, adding that he worried that anti-Wall Street rhetoric hurts people other than those it is aimed at.
If your first comment is Wall Street is horrible and you're in a position of leadership, you don't hurt Wall Street, Immelt said. But there is some guy in Illinois that's not going to build a factory today because he thinks the financial system is horrible. That's my point. This is a time when leaders, people like me should be trying to do things that are more convergent, because ultimately words count.
(Reporting by Scott Malone and Nick Zieminski; Editing by Derek Caney)